Q: I was selling a house, but the buyer backed out without reason. He just wanted to purchase a different house. What can I do?
A: Generally, when a buyer fails to close escrow without a legal justification, the seller’s main recourse is to keep the earnest money. It is because of this that sellers should always require a substantial amount of earnest money, to ensure that the buyer has “skin in the game” and isn’t willing to just walk away. Unless prohibited by contract, the seller’s alternative remedy would be to sue the buyer for the damages that the seller has incurred as a result of the failed transaction – the difference between what the seller would have received from the sale and what the seller ultimately received when the property was re-listed and sold. Unfortunately, this is a fact-intensive issue, including what amounts the seller spent carrying the property, amounts spent on title, and whether they actually lost money. This type of case can lead to expensive litigation and it is because of this, that sellers more commonly accept the earnest money and consider the matter closed.
Mark B. Zinman, Williams, Zinman & Parham P.C.
For more questions answered by Mark B. Zinman, visit: http://www.azreia.org